Mewa lal borrowed Rs. 20000 from his friend Rooplal at 18% per annum simple interest. He lent it to Rampal at the same rate but compounded annually. Find his gain after 2 years.
Given,
Principal= Rs. 20000
Rate = 18% p.a
Time = 2 years
Hence,
Interest that Mewa lal has to pay =
And,
Interest paid by Rampal to Mewalal = Compound interest =
=
Gain of Mewa lal = Rs.(7848 – 7200 ) = Rs. 648